Growing Muslim population propel a huge demand and potential for the halal food and lifestyle sector in the coming years.
Halal food and lifestyle, products manufactured or produced as per the Islamic laws, sectors are expected to grow phenomenally as Muslim population continues to grow and the companies hoping to tap into the lucrative market.
As per the latest State of Global Islamic Economy Report, published by Thomson Reuters in partnership with DinarStandard, consumer expenditure in 2012 for the fast-growing global halal food and lifestyle sectors was USD 1.62 trillion and is expected to be valued at USD 2.47 trillion by 2018.
“Global brands such as Nestle, Carrefour, Marriot, Pfizer, as well as regional investment firms and thousands of SME’s grapple with serving this fast growing, global, and complex market,” said Rafi-uddin Shikoh, Managing Director & CEO of DinarStandard, in a statement released yesterday.
The report defines halal as:
“Food permitted per Islamic dietary guidelines from the Qu’ran. Muslim followers cannot consume: pork or pork by products, animals that were dead prior to slaughtering, animals not slaughtered properly or not slaughtered in the name of God, blood and blood by products, alcohol, carnivorous animals, birds of prey.”
GCC halal food imports are set to jump from USD 25.8 billion in 2010 to USD 53.1 billion by 2020, and the UAE’s annual halal food imports is expected to reach USD 8.4 billion by the end of the decade – according to the Economist Intelligence Unit.
The UAE is all geared to position itself as the gateway of this growing industry segment. The UAE government has recently announced setting up of ‘Halal Cluster,’ a 6.7 million square feet land in Dubai Industrial City, for firms dealing in halal food, cosmetics, and personal care items, according to the CEO of Dubai Industrial City, Abdullah Belhoul.
“This industry itself, we know it is growing. So we think there is a lot of opportunity… and we need to capitalize on this,” said the CEO.
The report mentions that the global Muslim consumers spent about USD 1,088 billion in food and beverage consumption in 2012, accounting for 16.6% of global expenditure. “This expenditure is expected to grow to USD 1,626 billion market by 2018. This represents the Halal food potential market world-wide within its core Muslim consumer market,” according to the report.
The top countries in 2012 with largest halal food consumption included Indonesia (USD 197 billion), Turkey (USD 100 billion), Pakistan (USD 93 billion) and Egypt (USD 88 billion).
Similarly, Muslim consumers, according to the report, spent about USD 224 billion on clothing and footwear in 2012, about 10.6% of global expenditure, whereas the travel expenditure by the global Muslim population was over USD 137 billion for the same year.
As well, the media and recreation expenditure of global Muslim consumers were USD 151 billion, pharmaceutical expenditure was about USD 70 billion, while the cosmetics and personal care expenditure was USD 26 billion in 2012.
“Halal food already accounts for about a fifth of world food trade and 5% of the annual sales of one of the world’s leading FMCG companies”, according to Datamonitor, a market and data research company.
There are organizations such as Halal Control in Germany, World Halal Food Council that try to achieve worldwide guidelines for halal certifications, although global standard for such certification is still to come.
As the UAE moves towards channelizing the sector, Rushdi Siddiqui, an Islamic Finance (IF) and Halal industry pioneer, is joining DinarStandard, a growth strategy research & advisory firm specialising in the global Islamic economies, as a senior partner and its global leader/ head of Islamic economy. Rushdi is a strong advocate of halal food and Islamic finance, which he says are, “twins separated at birth”.
Realizing the potential Gulf offers for growth in the coming years, there are quite a few firms who have sensed this opportunity. One such company is The Brasil Food Company, one of the world’s largest food companies, who plans of opening its first manufacturing unit in the Middle East in Abu Dhabi, in June 2014.
Mark Napier, Director of the Gulfood trade, is very optimistic about the sector’s growth. “Food business is big business. Producers are increasingly aware of the need for halal standards and certification and bringing that to the fore of their export promotions.”